America's Benefit Specialist October 2023

MEDICARE MATTERS

companies for drugs selected for the first cycle of the Nego tiation Program. Those maximum fair prices will be effective in 2026. CMS will make public an explanation of the agreed upon maximum fair prices by March 2025. How does the Negotiation Program affect people with Medicare? As required by law, Medicare prescription drug plans, includ ing standalone Part D plans and Medicare Advantage-pre scription drug plans, must include on their formularies the selected drugs for which CMS and the participating drug company have agreed to a maximum fair price. CMS will use its comprehensive formulary review process for Medicare prescription drug plans to assess any practices that may un dermine access to selected drugs for people with Medicare. Will CMS disclose information about the negotiation process? CMS will make public an explanation of the negotiation pro cess and the agreed-upon maximum fair price of a selected drug, as well as share additional non-proprietary information that was part of the negotiation process, including infor mation submitted by other interested parties related to the selected drug and its therapeutic alternatives. Generally, CMS plans to wait to release information about the negotiation process until CMS publishes the expla nation of the maximum fair price of the selected drug. A participating drug company with a selected drug may choose to publicly discuss the negotiation process, and if a drug company chooses to disclose information prior to the publication of the explanation of the maximum fair price, then CMS may decide to make early disclosures about the negotiation process as well.

selected drug has several choices regarding participation in the Negotiation Program: 1. The drug company with a selected drug may choose to participate in the Negotiation Program. 2. The drug company with a selected drug may opt out of the Negotiation Program and pay an excise tax on sales of the selected drug to Medicare during defined periods. 3. The drug company with a selected drug may opt out of the Negotiation Program and avoid the excise tax on sales of the selected drug by withdrawing from the Medicare and Medicaid programs. That is, a drug company of a selected drug that decides not to participate in the Medicare Drug Price Negotiation Program may voluntarily terminate the Medicare Drug Price Negotiation Program Agreement if it also ceases participation in the Medicaid Drug Rebate Program, the Medicare Coverage Gap Discount Program, and the Manufacturer Discount Program through the end of the price applicability period for the selected drug. What happens if a participating drug company and CMS do not agree on a maximum fair price? CMS is committed to following the negotiation process specified by the law. All negotiations between CMS and the participating drug company of the selected drug must end at a certain date. For the first cycle of the Negotiation Program, the negotiation period ends August 1, 2024. Com panies are expected to select one of the options outlined above by that date. For additional information about the excise tax, please consult materials provided by Department of the Treasury, which is the agency responsible for its im plementation and enforcement. When will the negotiated maximum fair prices be available? By September 1, 2024, CMS will publish any maximum fair prices agreed upon between CMS and participating drug

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November 13-24 National Medicare Advantage Conference Las Vegas, NV www.wcforum.com/conferences/medicare March 11-13 Medicare and Margaritas Orange Beach, AL www.medicareandmargaritas.com

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